In times of uncertainty, prudence is justified in the normalisation of monetary policy.

The favourable outlook for the global economy is overshadowed by the threat of protectionism. In the euro area growth has picked up. Some of this acceleration is on a sustainable basis, but long-term growth is likely to remain slower than pre-crisis growth.

The Bank of Finland forecasts that Finland’s GDP will grow 3.1% in 2017, 2.5% in 2018 and 1.5% per annum in 2019–2020. Growth will be broadly based and amplified by exports. A more positive current account will lay a foundation for sustainable growth.

Global growth will strengthen relative to 2016 and proceed at a pace of over 3% in 2017–2019. Chinese growth will decelerate in an orderly manner, moderating the pace of global growth.

The euro area economy has now benefited from four years of unbroken growth, and this is expected to continue. The evolution of the global economy will be affected by the economic policy of the new US administration. A potential increase in protectionist actions may impair the expansion of the global economy and trade.

A very substantial degree of monetary accommodation is still needed in the euro area for underlying inflation pressures to build up and support inflation in the medium term. More Bank of Finland Bulletin articles will be published in the beginning of April.

The global economy is expected to grow by a full 3% annually in 2017–2018, i.e. only slightly faster than in 2016. World trade growth will remain slow relative to GDP growth, as in recent years.

Euro area monetary policy has been relaxed substantially in recent years. The expanded asset purchase programme has progressed according to plan and brought about a broadly based reduction in interest rates in the euro area.